Correlation Between Growth Fund and ZOOZ Power
Can any of the company-specific risk be diversified away by investing in both Growth Fund and ZOOZ Power at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Growth Fund and ZOOZ Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Fund Of and ZOOZ Power Ltd, you can compare the effects of market volatilities on Growth Fund and ZOOZ Power and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Growth Fund with a short position of ZOOZ Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Fund and ZOOZ Power.
Diversification Opportunities for Growth Fund and ZOOZ Power
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Growth and ZOOZ is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Growth Fund Of and ZOOZ Power Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZOOZ Power and Growth Fund is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Growth Fund Of are associated (or correlated) with ZOOZ Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZOOZ Power has no effect on the direction of Growth Fund i.e., Growth Fund and ZOOZ Power go up and down completely randomly.
Pair Corralation between Growth Fund and ZOOZ Power
Assuming the 90 days horizon Growth Fund Of is expected to generate 0.2 times more return on investment than ZOOZ Power. However, Growth Fund Of is 4.93 times less risky than ZOOZ Power. It trades about 0.11 of its potential returns per unit of risk. ZOOZ Power Ltd is currently generating about -0.03 per unit of risk. If you would invest 5,258 in Growth Fund Of on October 23, 2024 and sell it today you would earn a total of 2,440 from holding Growth Fund Of or generate 46.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 51.03% |
| Values | Daily Returns |
Growth Fund Of vs. ZOOZ Power Ltd
Performance |
| Timeline |
| Growth Fund |
| ZOOZ Power |
Growth Fund and ZOOZ Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Fund and ZOOZ Power
The main advantage of trading using opposite Growth Fund and ZOOZ Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Fund position performs unexpectedly, ZOOZ Power can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ZOOZ Power will offset losses from the drop in ZOOZ Power's long position.| Growth Fund vs. Capital World Growth | Growth Fund vs. Europacific Growth Fund | Growth Fund vs. New Perspective Fund | Growth Fund vs. Investment Of America |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
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